Blockchain: Operation and use

✔️ Information reviewed and updated in June 2024 by Eduardo López

Considered the foundation of modern cryptocurrencies, lBlockchain technology came to be a true revolution in the market. And it is that its novel operation allowed to create much safer and anonymous transactions easily and quickly, all this with just using the internet.

Before investing in cryptocurrencies, it is very important to know how the Blockchain works and the reason why it is so important for cryptocurrencies. Although it might sound like a complex mathematical term, in reality, it is not. That is why here we will talk about what the Blockchain is, how it works and what it is for.

✨➡What is the Blockchain?

Also known as blockchain, The Blockchain is a unique type of database whose task is to record transactions. To do this, it uses a series of blocks which groups together different transactions that are validated by a network of nodes (members).

Unlike current technology and conventional databases, the Blockchain performs the validation of each block of operations in a decentralized way. That is, they are validated through nodes which can be trusted people or institutions that are part of the Blockchain network.


Operating example

Let's imagine that José sends a Bitcoin to Juan, José would be A and Juan B. When A carries out the transaction for B, a record is generated which is grouped into a block. This block is passed to the network where the nodes are in charge of validating it.

Once said block of transactions has been validated, it is added to the chain of blocks, which is freely accessible to all users. After all this process, the bitcoin that A sent to B, that is, José to Juan, is validated and the transaction is closed.

What are the advantages of Blockchain technology?

  • Greater security: One of the points in favor of blockchain technology is that it turns out to be very secure. In fact, There is no technology capable of guaranteeing that the information in the blocks is inviolable more than the Blockchain.
  • Transparency: The final block network is publicly accessible, which guarantees total transparency and access to information by the block chain. Despite being freely accessible, this chain is also very secure and cannot be compromised.
  • Operating costs: By not requiring the use of intermediaries for the validation of the different stages of the transaction, as well as thanks to the use of communities in the form of nodes, the cost of operation of the Blockchain is lower. This, in turn, lowers the cost of transactions using this method, for example cryptocurrencies.
  • Versatile: Although the use of this technology is mainly intended for cryptocurrencies, work is being done to adapt it for other uses. In this way, we can see that it is possible to obtain a lot of benefits from blockchains.

Types of Blockchain


As the name implies, In the public Blockchain, transparency is the most important thing since blockchains are freely accessible. Anyone can enter and know the information of the blockchain, since there is no type of filter for it.

The advantages of this model is that it is fully decentralized, cAnyone can make a transaction and these are validated only by Blockchain miners. One of the greatest exponents of this type of technology is Bitcoin, since the most famous and most valuable cryptocurrency uses this blockchain.


Unlike the previous Blockchain, This operates in a partially decentralized way, since here those who validate the transactions are third parties. In other words, here we have the use of trusted intermediaries instead of miners (conventional people), which exerts more control over the chain.

A trusted third party can be a banking institution, for example, or a financial institution. Another characteristic is that this group of institutions, which form the network of nodes, can decide how open the chain is. If they want, they can allow free access to it and if not, they can restrict certain data.


Designed primarily for private companies, This type of Blockchain could be said to be centralized. This is because its operation and decisions revolve around a single third party which, generally, is a company. This company decides the degree of openness and restriction of data on the Blockchain.

All transactions are validated by this third party so it is he who controls the entire blockchain. Being private, it is not common to find this type of chain open to the general public since they are limited to the company and its immediate environment.

Technology within everyone's reachos

Although it might seem that the Blockchain is a complex technology, and to a certain extent, restricted, in reality it is not. Nowadays it can be said that the Blockchain is a technology of the Open Souce type, or in Spanish, open source.

This means that not only anyone can access the blockchain and know how it works and its data. You can also develop your own blockchain from the code of another as happened with bitcoin and a large number of other cryptocurrencies that were based on their Blockchain.


A change in the system?

Blockchain technology promises to be a great solution to today's cybersecurity and data protection problems. Although it is not widely used yet, this technology does present a good way to improve the security of transactions.

According to analysts, the growth of Blockchain use is expected to increase in the years to come. What's more, the development of blockchains for specific uses, such as the case of private companies, will undoubtedly boost this technology significantly.

Eduardo Lopez

Editor and Copywriter

I am Eduardo López Martínez, I was born in Madrid, Spain and I am 48 years old. I am a journalist and I am part of the team. Do you want to know a little more about me? I invite you to read my biography.

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